Currently, it shows what is referred to as a
bullish divergence, where price has kept falling while the RSI has been rising.
The Stochastic, Oscillator has improved and a
bullish divergence has been created on the RSI suggesting a recovery trend ahead with 42,233 and 43,190 in sight.
Further, the Moving Average Convergence Divergence (MACD) could also see a
bullish divergence if the index moves higher this week.
Technically from yesterday's local bottom can bounce with great pleasure, good signals
bullish divergence on MACD, and RSI on "hourly" charts on clear evidence.
Abu Dhabi's benchmark, which closed at 2 450 on Wednesday, may target 2 462, with a
bullish divergence on the relative strength index, a commonly used price momentum indicator.
A
bullish divergence in the RSI has led us to hold a positive outlook for the aussie, and we expect the pair to test 1.
Generally the
bullish divergences (a
bullish divergence would be where the price is going sideways or down but the accumulation/distribution line or other indications are bullish, or vice versa for a bearish divergence) are occurring in the laggards and the bearish ones in the leaders.
At the recent low, Arbeter stated, the euro got extremely oversold from a weekly momentum standpoint, and traced out a
bullish divergence.
We expect the EUR/JPY to reverse course in the near-term as a
bullish divergence in the RSI continues to unfold, and may test 162.
A
bullish divergence from the RSI could create some trading opportunities for us in the near future, and we continue to hold a bullish outlook for the EUR/JPY.
Also not shown (but is supportive of at least a near term low) is
bullish divergence with oscillators and extreme bearish sentiment.
lt;br /> "The daily price momentum based on the euro has put in
bullish divergences since mid-May, and weekly momentum is extremely oversold," he said.
